This week, the situation in the global hot rolled coil (HRC) market has been quite positive as suppliers in most regions have continued to increase their prices. Specifically, Asia-based sellers, especially those from Japan, Vietnam and Indonesia, have remained the most active in terms of sales and some of them have also been bullish. Besides, after a long pause Indian mills have started to increase export allocations as well, succeeding in concluding sales to the EU and the Gulf regions.
Indian mills have attempted to nudge up HRC export prices, not on the back of improved demand but rather given the temporary halt in price declines in some destinations like Europe and the improved sentiments from the withdrawal of the export tax in India. Suppliers have been successful in signing deals in most major destinations, but new deals have been signed at slightly lower levels than those voiced by mills last week. Ex-India HRC prices have settled in the range of $525-545/mt FOB compared to offers quoted at $535-550/mt FOB late last week. A number of deals have been reported as having been done in this new price range, though volumes have been moderate. Even though mills have had to adjust prices from the initial targets, this level is still better than the levels a week before - $518-530/mt FOB. A deal for 30,000 mt of ex-India HRC was concluded by a private mill for early January shipment to the UAE at $560-570/mt CFR, which translates to $525-530/mt on FOB basis. Also, sales to Europe have been reported at $535-543/mt FOB. The most competitive offer from one Indian mill to Asia was at $550/mt CFR Vietnam, which corresponds to $525-530/mt FOB at the lowest. Moreover, a western India-based mill reported a trade for delivery to Vietnam at $530/mt FOB. Following a number of deals, most Indian mills have hiked offers by the end of the week by $10-20/mt in the mentioned destinations.
In Vietnam, import HRC prices have been moving in different directions in Vietnam, with no deals reported so far due to slack demand. In particular, Chinese traders, who were offering SS400 HRC at $540/mt CFR last week, have increased their offers to $545-550/mt CFR this week, while offers for ex-China SAE1006 have been voiced at a minimum of $570/mt CFR, up by $5-10/mt week on week. Suppliers from Japan and India have decreased their offers for SAE1006 HRC to $550/mt CFR, down by $10/mt week on week. Thus, the reference price for import SAE1006 HRC in Vietnam has come to $550/mt CFR, compared to $550-560/mt CFR last week. At the same time, while demand for HRC has continued to weaken in Vietnam, affecting import trade activity, HRC exports have been rebounding. In particular, market insiders have reported 105,000 mt in total of HRC sold to India by Vietnamese producer Formosa Ha Tinh Steel at $570-575/mt CFR (around $535-540/mt FOB) at the end of last week-beginning of this week, following a deal for around 40,000-50,000 mt at $550/mt CFR ($515/mt FOB) two weeks ago. Another deal for around 10,000-20,000/mt of ex-Formosa HRC has been reported in Turkey at $575/mt CFR.
Chinese HRC exporters have increased prices over the past week amid signs of a rebounding trend in the local and futures markets. In particular, export offers for boron-added SS400 HRC given by major Chinese mills are at $540-560/mt FOB for January and February shipments, with a midpoint at $550/mt FOB, up by $10/mt week on week. Besides, Chinese traders have decided to go higher as well, pushing the tradable level for ex-China SS400 HRC to around $535-550/mt FOB, up by $10-20/mt week on week. As a result, ex-China SS400 HRC offers to Vietnam have settled at $545-550/mt CFR, up by $5-10/mt over the past week. Furthermore, after several deals for ex-China HRC sold in short positions at $560/mt CFR Pakistan, new deals have been reported at $580-585/mt CFR Karachi. Meanwhile, during the given week, HRC prices in the Chinese domestic market have edged up amid the increasing trend of HRC futures prices. However, cautious sentiments have started to prevail among market players due to the cold weather hitting China. Domestic HRC prices in China are at RMB 3,830-3,990/mt ($545-568/mt) ex-warehouse on December 2, with the average price level RMB 55/mt ($7.8/mt) higher than that recorded on November 25, according to SteelOrbis’ data.
The uptrend in the import scrap segment in Turkey has led to the improved mood in the finished steel market. However, while the longs segment has been reacting confidently and positively, in the HRC market the mood is a bit tenser. The official local HRC offers have increased by around $20/mt to $640-660/mt ex-works base over the past week, but it is widely believed that the workable price levels are still hardly above $630-635/mt ex-works. In the meantime, import offers from Asia have started to improve also. The lowest prices were seen in the 30,000-40,000 mt deals from Indonesia at $565-575/mt CFR and in a 10,000 mt sale from Vietnam at $570-575/mt CFR. By the end of the week, most ex-Asia offers have settled at around $585-595/mt CFR, while China and India have been targeting to sell at up to $600/mt CFR. Market players are still reporting low demand for HRC, but some have started to report an improved situation in the coated and cold rolled segment. While HRC prices have been trending up, local buyers have started to accept the previously valid prices for HDG of up to $840/mt ex-works, while CRC offers have increased by around $20-30/mt over the past week to $750-780/mt ex-works.
The Emirati HRC import market has also become more positive in terms of buying activity mainly because some customers have decided to restock before prices go up even further. Several HRC lots from India were sold to the UAE at $560-570/mt CFR levels, while later the offer price for this origin increased to $590-600/mt CFR. Another 10,000 mt lot was booked from Japan at $580/mt CFR this week. In the meantime, China has increased its HRC offers to the UAE by $10-25/mt to $580-595/mt CFR, with no deals reported yet. Most market players expect the restocking of HRC in the UAE to continue and more deals to be heard.
In Europe, as anticipated, the downward trend of HRC prices in Europe has started to reverse this week, especially in Italy. Workable prices in the EU HRC market have settled at €610-650/mt ex-works, compared to €590-650/mt ex-works last week. In particular, official HRC offers from Italian mills have settled at €610-650/mt ex-works, up by around €10-30/mt week on week, while the workable prices have increased by €20/mt to €610-620/mt ex-works over the past week. In northern Europe, prices averaged at around €630/mt ex-works, the same as last week, though the transaction prices have remained at €600-620/mt ex-works. In the meantime, import HRC offers in southern Europe, which had started to rebound since last week, have settled at €610-640/mt CFR, depending on the supplier, up by €10/mt week on week. In particular, most Asian suppliers, like those from Japan, South Korea, Vietnam and Taiwan, have been refraining from new offers, with the indicative price level estimated by European buyers at €610-615/mt CFR, up by 10/mt over the past week. Besides, after a deal for ex-India HRC was reported at €590/mt CFR Italy at the beginning of this week, another deal is reported to have been done at €600/mt CFR Italy, while new offers have increased to €610/mt CFR Italy. Customers from Spain have reported offers for ex-India materials at as high as €630-640/mt CFR, compared to €600/mt CFR last week.